zdl_cryptofandomcom-20200214-history
Tether (USDT)
Basics * Short explanation: Stablecoin where the price equals 1 USD. * Longer explanation: Tether is a cryptocurrency pegged to the value of a US dollar, and is therefore referred to as a ‘stable coin’. This allows it to act as a USD substitute that can be moved between exchanges, instead of traders having to cash out for real dollars. * A stable coin anchored to the price of national currencies like the US dollar, the Euro, and the Yen. * Tether creates cryptocurrencies whose price are tethered to that of FIAT currencies. Currently supports USD and EUR and will soon add JPY. It therefore acts a safe haven for traders on crypto exchanges. * "Tether is using (12-2-2020) Chainalysis' "Know Your Transaction" tool to create risk profiles for USDT users and monitor potentially suspicious activity." Tokens on different platforms * Platform: Tether blockchain, no consensus mechanism. Not Mineable. Originally based on the Omni protocol which is built on top of the Bitcoin Blockchain. * Also has an ERC20 version. On August 28, 2019, there are 39,000 tether transactions on the BTC network via Omni, but that number is eclipsed by the 126,000 ETH-based tether transactions. At the time of publication, there’s roughly 1.5 billion USDT minted using the ETH chain and 2.5 billion tied to the Omni Layer network. Update (2-1-2020): "Last summer, when ERC20 tether transactions flipped the number of USDT Omni transactions, the crypto space took notice. The amount of tether on the Omni Layer at that time (2.5 billion) has since dwindled to just 1.5 billion at press time, with the ETH network currently housing over 2.2 billion tethers on chain." * Also has a Tron version: "Since the announcement of TRC20 tether in March 2019, USDT supply on the Tron Network has risen to over 900 million tokens. In October 2019, the supply of USDT on the Tron network made up almost 12% of all tethers. Fast forward to January, 2020, and the total supply of Tron USDT is 916,550,610.601 at press time. Given that the supply of USDT across all its various networks is 4,207,771,504, this means that TRC20 tethers now make up nearly 22% of the total supply of tokens." "The EOS network is also home to the stablecoin, and sees tether’s circulating presence there at just over 5 million tokens, with a Bitfinex-managed account holding 88.6% of this supply. Where Tron is concerned, a Binance account is the top holder, and on the ETH network the top holder is Huobi. USDT also has a presence on the Algorand blockchain." Tether Gold (XAUT) * From CMC (6-2-2020): "XAU₮ is a digital asset offered by TG Commodities Limited. One XAU₮ token represents one troy fine ounce of gold on a London Good Delivery gold bar. Holders of XAU₮ obtain the combined benefits of both physical and digital assets. XAUt token holders will be able to enjoy ownership of gold while avoiding drawbacks associated with physical gold, such as high storage costs and limited accessibility." * Tether Gold has no custody-associated costs, and will be available (23-1-2020) as an Ethereum or a TRON token. Issues Tether claims to keep a 1:1 reserve of real US dollars for every USDT released. It has had issues in proving the validity of this claim, which has caused many in the community to become skeptical of the company behind the token. * Every USD/EUR/JPY is backed with real currency in a reserve, or at least, so they claim. This has been under scrutiny for years now. So far (9-2018) Tether has not been fully audited by an outside neutral party. * “Every tether is always backed 1-to-1, by traditional currency held in our reserves.” used to be written on their website but has since been taken away. * Tether admitted that only 74% of its circulating coins were backed by cash and cash equivalents. * Accidentally minted and subsequently burned $5B USDT (7-2019) according to Whale Alert; CTO Paolo Ardoino claims a decimal mistake was made during a transfer with crypto exchange Poloniex and Tron; the $5B was burnt almost immediately Usage * As of 8-2019, Tether captures 77% of all BTC trades, 53% of ETH and 54% of BCH trades worldwide. * Tether currently (4-2-2020) accounts for about 85% of the total stablecoin market cap. Comparatively, Tether made up about 77% of the market cap on January 1st, 2019. * From a Bitcoin.com article (18-10-2019): "Just 104 tether addresses hold 70% of the stablecoin’s circulating supply, according to an investigation conducted by blockchain intelligence company Intotheblock. Considering tether’s supply and its $1-dollar price, the fiat equivalent is over $2.8 billion." As IntoTheBlock put it: ''- There are 104 addresses that control 70% of the circulating supply - In the last 7 days, the total volume of large transactions (greater than $100k) was $2.4b - The avg the token is held: 17.8 days'' Tether and Bitcoin price correlation * "The issuance of new tether tokens is helping Bitcoin prices rise, according ''(4-10-2019) to new research by TokenAnalyst. The company found up to 70% of the time there is an issuance of Tether, the price of bitcoin also rises, a significant discovery when we’re remind there was more than 2 million tether minted this year. The numbers also change depending on which kind of Tether is gonna be minted. It rises 70% of the time there is tether being issued as an ERC20 token, and 50% of the time it is issued on their native Omni chain."'' Pros and cons Risk * Questions about how this is backed. If all users were to withdraw simultaneously the network would collapse * Bitcoin price seems to be manipulated by Tether issuance Advantages * Useful as a safe haven when trading when entering a bear market Team, partnerships, etc. * Collins; co-founder, also raised more than 20 million from an ICO for BlockV, his app store for the blockchain. * Van der Velde, Jean-Louis; CEO * Partly owned by PAG Asia, who also owns part of Bitfinex and has the same CEO as Bitfinex * Partnered with Bitfinex, Factom and Poloniex Category:Coins/Tokens